The share of mortgages under review this month rises on average by 1,400 euros, pending the interest rate hike that the ECB approves in July
The Euribor has definitively moved away from the moderate levels it had been moving in for the past two months, after leaving in April the negative territory it had settled in for the past six years. The main interbank indicator closes at the 1% level in June next year. Specifically, the average for the month will be 0.8%, which is the highest percentage since August 2012.
This record implies a strong increase compared to May, when the indicator ended at 0.28%, and even more compared to June 2021, when it reached -0.484%. The conversion the index has gone through has been exponential in just weeks as it stood at -0.5% late last year. In a matter of four months, he became positive. And in just six weeks it has risen to its current level.
Due to this increase, the terms of variable mortgages that have to be revised with this data are again becoming more expensive. With an average mortgage of 150,000 euros, for 25 years and interest on Euribor plus 1%, the repayment amount increases by more than 1,400 euros per year.
The upward trend of the Euribor has accelerated as the market is already forecasting a 25 basis point rate hike in July. European Central Bank (ECB) president Christine Lagarde reiterated on Tuesday that the September surge could be larger to stabilize an “undesirably” high inflation rate.
On the other hand, the estimates are not at all flattering. The 12-month Euribor will end this year at 1.90% in 2022 and will rise to 2.20% in 2023, according to Bankinter’s latest estimates in its third quarter strategy report.
ECB President Christine Lagarde assured Tuesday that the institution is ready to go “as far as necessary” to ensure inflation stabilizes at 2% over the medium term. He is convinced that the tool to combat market fragmentation will make it possible to raise interest rates if necessary.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
